Bitcoin falls below $98,000 – is this a great buying opportunity for investors?

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Bitcoin, the leading cryptocurrency by market capitalization, has recently experienced a sharp and sudden price correction, sparking debate among investors.

Concerns have arisen as to whether this downturn signals the end of the current bull cycle or simply represents a temporary setback.

While short-term holders face losses, long-term indicators provide a broader perspective on Bitcoin's trend, as analyzed in a recent report by CryptoQuant's Avocado Onchain.

Opportunity or the end of the bull cycle?

According to Avocado Onchain, investors who entered the market during Bitcoin's recent peak of $98,000 have realized prices that put them at a loss.

However, for those who invested one to three months ago, the realized price was significantly lower at $71,000, providing a buffer against the current correction.

Avocado noted that the historical pattern of Bitcoin's 2021 bull cycle shows similar alternations between record highs and sharp pullbacks, suggesting that these declines do not necessarily mean the end of the cycle. Instead, they have historically been "opportunities" for market rebalancing and subsequent growth.

A key indicator analyzed is the 30-day moving average of the short-term SOPR (Spending Output Profit Ratio). The indicator tracks whether recent market participants have sold at a profit or loss.

Current SOPR data shows that the recent influx of short-term funds into Bitcoin has not yet led to significant profit-taking. Unlike previous cycle peaks characterized by aggressive selling, the current pullback appears to be mild, suggesting that the market may still have room to rise.

In addition, Avocado Onchain emphasizes the importance of distinguishing between short-term adjustments and broader cyclical trends. Bitcoin's tendency to rebound after corrections in past bull cycles reinforces the view that the current downturn may not mean the end of the cycle.

These insights are consistent with the behavior of long-term holders, who often use corrections to consolidate their positions, thereby enhancing market resilience.

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